Gadi Lesin, President & CEO of Strauss Group, and Todd Morgan, CEO of Strauss Coffee, Announced Today Further Expansion of Strauss Coffee, Which Acquired the Businesses of LeCafe in Russia

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Nov 28, 2010, 09:31 ET

    TEL AVIV, Israel, November 28, 2010 /PRNewswire-FirstCall/ --

    - This Transaction Includes Whole Ownership (100%) of LeCafe
      Brand and Partnership (51%) in LeCafe Group's Real Estate, Including a
      Logistics Center, Offices and an Area Where Strauss Coffee Plans to
      Build a new, Wholly-owned R&G Coffee Plant

    - Investment in this Transaction Totals $43 Million

Gadi Lesin, President & CEO of Strauss Group, said today: "Strauss Group is today completing another phase in the expansion and enhancement of its competitive position in the Russian coffee market which is considered to be one of the largest in the world. This acquisition takes us to the next level in our growth strategy in Russia, an area that has presented growth over the past four years. It follows several acquisitions conducted by the company in recent years along with steady organic growth, which have all transformed Strauss Coffee Russia from a $20 million company (at the end of 2007) to a $160 million company, post-acquisition."

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Todd Morgan, CEO of Strauss Coffee, said today: "This acquisition will enable us to enhance our position as the number 3 instant coffee playerand number 2 R&G coffee player in Russia. We will do so by strengthening our portfolio with a familiar brand, gainingmore market shares and increasing our shelf space significantly."

About the transaction:

Strauss Group is announcing today that its subsidiary Strauss Coffee B.V. (74.9%) has acquired the LeCafebrand sold in Russia and CIS. Gross revenues of the brand stood at $23 million in 2009 and at $16 million by the end of September 2010.

Strauss Coffee will pay USD 37 million for the brand. The consideration will be paid on the transfer date of ownership to Strauss Coffee.

Additionally, Strauss Coffee acquired 51% of LeCafe Group shares for USD 6 million. LeCafe is the owner of real estate such as buildings and warehouses that will serve as a logistics center for Strauss's activity in Russia, and as an area where Strauss Coffee will set up a wholly-owned R&G coffee plant.LeCafe also engages in the sale of non-branded instant coffee in Russia and CIS.

Strauss Coffee plans to invest USD 6 million in the construction of the plant in 2011 and 2012.

The transaction and construction of the plant will be funded by Strauss Coffee.

About Strauss Coffee of the Strauss Group

One of five companies affiliated with Strauss Group and operating in CEE, Brazil and Israel, Strauss Coffee is currently the fifth-largest coffee company in the world in terms of green coffee procurement volumes and one of the world's fastest growing coffee companies over the past five years.

Strauss Coffee employs 6,000 people, and its turnover totaled NIS 3.35 billion at the end of 2009.

Strauss Coffee's activities focus on the R&G (Roast & Ground) sector, and it also produces and markets instant coffee. The company also engages in coffee related products, providing coffee solutions to both the in-home and away from home markets, including coffee shops, restaurants, hotel and offices.

The Company enjoys a leading position in the coffee markets where it operates,

    To visit at our website: http://www.strauss-group.com

    For additional information:

    Media Contact
    Osnat Golan
    VP Communications
    Strauss Group Ltd.
    Tel +972-3-6752281
    Mob +972-52-8288111
    Email: [email protected]
    http://www.strauss-group.com

    Investors Contact
    Yaffa Cohen-Ifrah
    Director of Investor Relations
    Strauss Group Ltd.
    Tel: +972-3-6752545
    Mob +972-54-5772195
    Email: [email protected]
    http://www.strauss-group.com

SOURCE Strauss Group Ltd